Council OKs plan to allow AEG to manage L.A. Convention Center

Entertainment and sports company Anschutz Entertainment Group will take over operations at the Los Angeles Convention Center under a contract tentatively approved Wednesday by the City Council.

In a 10-0 vote, the council backed a recommendation to allow AEG, owner of the Staples Center and L.A. Live, to run the city-owned and operated downtown facility.

Under the deal, the city will retain ownership of the 1970s-era center, but AEG will manage the site.

The city is seeking to turn around the fortunes of the convention center, a money loser and an ill-designed space that has failed to attract big-name conventions. The hope is that an outside operator will be able to boost revenues, noted City Administrative Officer Miguel Santana, who recommended the selection of AEG.

"The most successful conventions are run by private operators," he said. "We want to be competing against San Francisco and Chicago. Right now, we're competing against Sacramento."

AEG beat rival competitor SMG World for the job. Both companies had submitted proposals to operate the facility. Swaying the city was AEG's proposed annual management fee, which was far lower than the one offered by SMG, Santana said, adding that AEG's fee was $250,000, while SMG's was more than double that figure.

In a brief interview Wednesday, Ted Fikre, vice chairman of AEG, said the company is "uniquely qualified" to manage the center.

"Our vision for the convention center is to drive more activity to it," he said.

Wednesday's council action drew criticism from Service Employees International United Local 721, which represents convention center workers.

David Sanders, regional director of city workers union SEIU 721, said the city shouldn't be turning over its assets to outside operators. While Santana said no layoffs are planned, Sanders questioned whether the 100 part-time workers at the Convention Center will be able to keep their jobs.

SMG filed a protest two weeks ago over Santana's recommendation of AEG, claiming the Los Angeles-based company lacks extensive convention-center management experience. AEG operates or controls six convention centers in Australia and West Asia, according to its website, while SMG, headquartered in West Conshohocken, Pennsylvania, runs 70 centers in North America.

SMG vice president Gregg Caren did not respond Wednesday to a request for comment.

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